Design Inspiration: Making the Most of a Bay Window

A window niche is design feature many would welcome. While this naturally lit offshoot of a room appears dreamy and wonderful, it can also be difficult to furnish. Finding a balance between maintaining functionality of the space while also integrating it into the rest of the room can be quite a challenge.

Here in San Francisco, Victorians with bay windows can be found at every corner. Living in a small one bedroom that features a bay window niche, I'm constantly brainstorming and experimenting with ways to let this lovely little space shine. How do you allow it to flow with the rest of the room, while truly taking advantage of this extra bit of valuable square footage?